Higher education can be a financial disaster. Especially with the return on degrees down and student loan sharks on the prowl.

BY KATHY KRISTOF

As steadily as ivy creeps up the walls of its well-groomed campuses, the education industrial complex has cultivated the image of college as a sure-fire path to a life of social and economic privilege.

Joel Kellum says he's living proof that the claim is a lie. A 40-year-old Los Angeles resident, Kellum did everything he was supposed to do to get ahead in life. He worked hard as a high schooler, got into the University of Virginia and graduated with a bachelor's degree in history.

Accepted into the California Western School of Law, a private San Diego institution, Kellum couldn't swing the $36,000 in annual tuition with financial aid and part-time work. So he did what friends and professors said was the smart move and took out $60,000 in student loans.

Kellum's law school sweetheart, Jennifer Coultas, did much the same. By the time they graduated in 1995, the couple was $194,000 in debt. They eventually married and each landed a six-figure job. Yet even with Kellum moonlighting, they had to scrounge to come up with $145,000 in loan payments. With interest accruing at up to 12% a year, that whittled away only $21,000 in principal. Their remaining bill: $173,000 and counting.

Kellum and Coultas divorced last year. Each cites their struggle with law school debt as a major source of stress on their marriage. "Two people with this much debt just shouldn't be together," Kellum says.

"The two disillusioned attorneys were victims of an unfolding education hoax on the middle class that's just as insidious, and nearly as sweeping, as the housing debacle. The ingredients are strikingly similar, too: Misguided easy-money policies that are encouraging the masses to go into debt; a self-serving establishment trading in half-truths that exaggerate the value of its product; plus a Wall Street money machine dabbling in outright fraud as it foists unaffordable debt on the most vulnerable marks."

Getting a college degree isn't always a bad thing, but it's not always a good thing, either.

O boo hoo hoo. If each had a six figure income, then I’m guessing they were living the high life instead of paying off the debt. If they had lived on one of their incomes and used the other to pay off the debt, they’d be done with it by now. Silly people.

A 40-year-old Los Angeles resident, Kellum did everything he was supposed to do to get ahead in life. He worked hard as a high schooler, got into the University of Virginia and graduated with a bachelor's degree in history.

I concur with just about every point that is made in this article about the idiocy of taking on huge piles of debt to pay for "higher education."

I would recommend attending school on a part-time basis (and working on a full-time basis, or close to it) as one possible alternative to this scenario. I can't think of too many careers in which $140,000 of debt would actually be a good investment.

Beyond the fact that he received a BA that guarantees you’ll need to go to grad school unless you want to teach HS for peanuts, these people lived in LOS ANGELES—one of the most expensive cities on the planet. No wonder their six-figure salary went nowhere.

Why didn’t they take their fancy law degrees and move somewhere cheaper?

Together, they make in excess of $200,000. If they rented a small apartment or paid on a small home and had low ownership cost cars to drive, then there is no question that this debt could be quickly paid off.

They are living expensive, rather than prudent, lifestyles.

14
posted on 01/15/2009 10:18:44 AM PST
by ConservativeMind
(What's "Price Gouging"? Should government force us to sell to the 15th highest bidder on eBay?)

Nonsense. Nothing increases one’s bankability as surely as an education. With few exceptions there is no greater obstacle to earning potential than lacking education. For every billionaire dropout like Bill Gates there are a million earning $35,000 a year.

It’s true that it works for some and not for others. I hold four degrees (a Bachelors, two Masters and a Doctoral Level degree). At 46 I still have $59,000 sitting out there at 3.75%. Was it worth it? Yes. Why? Because I was able to get into ivy league programs and parlay them into a very high paying career.

To undertake that financial obligation for a soft science degree and masters or law degree from a third tier university and then to marry someone who did the same thing might not be an ideal financial move. It works on a case by case basis.

A 40-year-old Los Angeles resident, Kellum did everything he was supposed to do to get ahead in life. He worked hard as a high schooler, got into the University of Virginia and graduated with a bachelor's degree in history.

Where did this goofball get the idea that a degree in history would make him money?

I agree with that, but I would also suggest that the type of education one receives or even the manner in which that education is obtained could actually be a LIABILITY for someone -- not an asset.

I work in a field (engineering) that typically requires an extensive education involving difficult subjects. My best employees are the ones who paid their way through "marginal" schools -- often taking 6-7 years even just to finish an undergraduate degree.

I'll take these folks over their counterparts with expensive Ivy League educations any day.

This just blows me away...supposedly intelligent people submerging in debt for worthless sheepskins. They should have bought old cars, or stamps, or gold bars. At least there would be something of value to sell off. I bet they expected this all to be guaranteed to pay back.
The real trouble here is the failure of the school system to give kids any inkling of personal finance training, which could at least prepare them to make better decisions about debt. My two didn’t get it either...

23
posted on 01/15/2009 10:23:07 AM PST
by randomwalk
(Liberalism is a psychosis...)

I have to say that I value a good, honest auto mechanic, plumber, HVAC technician or house painter as much as I do a good, honest accountant or lawyer. And to be candid I believe that one is just as difficult to find as the other and all of them are worth the money when you need them. Skilled and honest tradesmen are real assets to a community and I would have no problem at all encouraging my son or any young person to seek training in a needed trade. A lot of these tradesmen make good money and given the relative glut of degreed individuals in certain sectors make more than many who have submitted themselves to “higher education” in a lot of cases.

Where did this goofball get the idea that a degree in history would make him money?

A degree in history (with a heavy load of English lit,) is the best prep for law school you can have. If this guy had law school in mind when he was an undergrad he was doing the right thing. As can be seen by the nice job he landed after passing the bar exam!

32
posted on 01/15/2009 10:29:07 AM PST
by Snickersnee
(Where are we going? And what's with this handbasket?)

Th other half of the story is that every time the government offers guaranteed student loan programs the colleges factor the availability of loan money into what they ‘expect’ students can afford and jack up their rates.

O boo hoo hoo. If each had a six figure income, then Im guessing they were living the high life instead of paying off the debt. If they had lived on one of their incomes and used the other to pay off the debt, theyd be done with it by now. Silly people.

Keep in mind that when you both make a six figure income that the government lives off one of them, so you are already living off just one yourself. Additionally, you make too much money to deduct any of that school debt.

That said, yea, they should have just increased their standard of living marginally after taking the jobs and paid off the debt in four years time.

34
posted on 01/15/2009 10:30:03 AM PST
by SampleMan
(Community Organizer: What liberals do when they run out of college, before they run out of Marxism.)

By the time they graduated in 1995, the couple was $194,000 in debt...and each landed a six-figure job. Yet even with Kellum moonlighting, they had to scrounge to come up with loan payments.

BS. Let's assume with both making 6 figures, they are clearing $12k a month (rough estimate, depends on state, etc - that and "6 figures" is very broad, so I am estimating from the low end, i.e. $200k per year, pre-tax). The student loan payments with 12% interest (as quoted in the article) would be around $2.9k a month over a 10 year term, or $2.3k a month over a 14.5 years. If they cannot live off $9k a month, they are mind-numbingly stupid.

IMO a History Degree would be worthwhile except that Most History depts have become post modern shitte-holes. The problem is the extreme bias of most of the History/Social Studies academia. The Universities are ripe for change...they are tottering as their investments have cratered and the Cost/Benefit equation has come into focus.

Ping list for the discussion of the politics and social (and sometimes nostalgic) aspects that directly effects Generation Reagan / Generation-X (Those born from 1965-1981) including all the spending previous generations are doing that Gen-X and Y will end up paying for.

Freep mail me to be added or dropped. See my home page for details and previous articles.

42
posted on 01/15/2009 10:38:16 AM PST
by qam1
(There's been a huge party. All plates and the bottles are empty, all that's left is the bill to pay)

Uh, so why didn't they pay off the $174,000 loan? they had no kids, could presumably live in a $2,000/month house or condo. I put their (rational) joint living expenses at a max of $40,000 annually, including 2 car loans. Assuming their combined in come was $250,000/yr, what was the problem? and what kind of assclown wants us to feel sorry for them?

2banana...you have it right about the way to view Higher Ed...BTW I checked your about page here and lloved the history lesson on the Right to Bear Arms and the Agincourt to American Revolution analysis.

The return on investment can be lousy if you are in the tech world where the Bill Gates’ of the world are pushing for more HB-1 visas for foreign workers to come to America and undercut the job market (Microsoft competes against the modelling industry for HB-1 visas, they want Indian programmers and the fashion world wants Russian girlies).

Add to this equation offshoring of R&D (especially but not limited to product testing) and there is no job security. The corporations lobby the government to secure cheaper labor.

49
posted on 01/15/2009 10:46:01 AM PST
by weegee
(Beware the Green Menace, the socialists warning you of global warming under your bed are hysteric.)

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